Further consolidation in web offset and synergy in packaging is needed

manroland web systems and Goss to merge

The manroland web systems Varioman fp shown at the Open House at Augsburg from 27 Feburary to 1 March 2018

In a joint press release on 1 March 2108, Goss International and manroland web systems announced the merger of their web offset businesses. The combined company is to benefit from the two companies’ complementary geographic footprints, create extensive synergies, ensure long-term viability, and provide value-oriented solutions, especially in the area of aftermarket services. The new entity is envisioned as a stronger service provider of web offset printing systems for publication, commercial and packaging printers. Subject to regulatory approval, the merger is expected to be completed by the middle of 2018.

                                                                                                                                The current shareholders of Goss, American Industrial Partners, and of manroland, the Possehl Group will continue to co-own the combined company. Goss’ Contiweb, the web handling, drying and inkjet systems division taken over from Heidelberg in 2004, is not included in the transaction and will continue as an independent company owned by American Industrial Partners. AIP is a private equity firm based in New York known in the printing industry for its investments in Presstek, Mark Andy and Day International.

                                                                                                                                  In the press release, Mohit Uberoi, CEO of Goss stated, “This combination will enable us to achieve extensive synergies that will help us optimally serve our customers into the future. The combination will strive to provide a best-in-class product offering and customer service.” Alexander Wasserman, CEO of manroland web systems, added, “Our customers will be able to choose from a wider portfolio of products and services.” According to them, the new company will rely on the combined expertise of its employees and will further continue its activities in the fields of innovative web printing systems, services, consumables and system components for the newspaper, commercial, packaging and digital printing markets.

                                                                                                                                  In addition to the new machinery and service business, the expansion of the business with retrofits and upgrades, and the systematic expansion of eCommerce activities will be major areas of focus. The combination will not impact any current business of both companies. Until the transaction closes, sales and service channels will remain unchanged.

                                                                                                                                Both companies have a long history in web-fed offset. Goss International, currently headquartered in Durham, New Hampshire, USA, was founded by brothers Fred and Sam Goss in Chicago in 1885. The Goss Printing Press Company was the first to develop a web-fed newspaper press and claimed to have built the first presses with microprocessors, key presetting systems, remote ink key control, and gapless blankets. The company has operations in the US, Europe, Brazil, China, Japan, Singapore and Australia.

In 1993, Goss and Shanghai Electric started a joint-venture for the construction of single-width presses, and in 2010, Shanghai Electric completed its gradual take-over of Goss after acquiring Heidelberg’s last 15%-stake in Goss. Six years earlier, Heidelberg had already transfered its entire web-fed press business to Goss, including Contiweb which in turn acquired the Thallo press for flexible packaging from DGP. By 2016, American Industrial Partners completed its acquisition of Goss International from Shanghai Electric.

Manroland’s history goes back to 1844, when Carl August Reichenbach, nephew of KBA-founder Friedrich Koenig, established the Reichenbachsche Maschinenfabrik, which after several mergers was renamed Machine Factory Augsburg-Nürnberg or MAN and, from 1979, the MAN Roland Druckmaschinen as a division of MAN, also known for among other industries, as a major truck manufacturer. In 2006, MAN sold 65% of its shares to private equity firm Allianz Capital Partners.

                                                                                                                                    However, in November 2011 the company had to file for insolvency. Two months later, its web division in Augsburg, renamed manroland web systems, was sold to the Possehl group of companies active in construction, electronics, elastomer and precious metals processing, cleaning machinery and document managing systems. Manroland’s sheetfed division in Offenbach, along with real estate, manufacturing sites and service subsidiaries, was renamed manroland sheetfed and sold to UK-based engineering company Langley Holdings, active in various steel and chemical industries.

                                                                                                                                  Our view
                                                                                                                                We have been writing about the inevitable consolidation of the offset press and particularly the web offset press industry since drupa 2004. Even then, one of the more direct CEO’s of the nine global manufacturers aware of the diminishing demand for presses with greater than 70,000 copies an hour presses, told us, “We cannot stand alone.” However, other CEO’s either did not see the rapid decline coming or simply blustered with false optimism. One might stay that the consolidation process has not gone smoothly over the past 14 years and it has been gradual rather than surgical.

                                                                                                                                  In Europe and America, while Heidelberg divested to Goss, Solna and Wifag were unable even together of really being consolidated with a bigger manufacturer and these two manufacturers have simply faded away. Similarly, KBA (now K&B) was unable to consolidate with either of the two other German press manufacturers although it was always the most realistic about the decline of the high speed web offset industry. Manroland ultimately couldn’t be rescued by government funds and was split up into web systems and sheetfed companies and each of these was acquired by engineering group investors. In Japan there is still room for the consolidation of TKS, Seikan and Mitsubishi in web offset although Mitsubishi has been able to divest its sheetfed offset press manufacturing to a new joint venture with Ryobi known as RMGT. Komori continues to manufacture web offset heatset commercial presses along with its financially solid sheetfed press business.

                                                                                                                              Now inspite of a somewhat temporary reprieve from Shanghai Electric and the reclamation of Goss by American investors, the inevitable and somewhat belated consolidation of Goss and manroland web systems is taking place. While this is wholly welcome, further consolidation is needed since the global market for new offset presses above 70,000 copies an hour has shrunk to below Euro 300 million. There is now huge overcapacity for even spare parts and engineering services where many manufacturers are ready to service, modernize and refurbish presses from competitors.

                                                                                                                                  Synergy in packaging is needed                                                                                                                                                                                                                          What is interesting is that both Goss and manroland web systems are keen on building web presses for the packaging industry. For printing on flexible materials Goss has its VPack and manroland has sold its first VariomanFP which is a web gravure and offset hybrid press shown in Augsburg from 27 February to 1 March which is also the date of the consolidation announcement. Both have technology tie-ups that stem from what was earlier known as Drent; DGP is part of the Goss Contiweb while manroland web systems has developed its Varioman offset units with cooperation partner Goebel.

                                                                                                                                The statement describing the current agreement for the Goss-manroland web systems consolidation clearly says that the Contiweb business of Goss International is not included in this transaction. We do not understand the reasons for this since both companies see packaging as an important if not the most important component of their future and unless both are overly optimistic about their individual approaches to the packaging market or are currently under other constraints in seeking needed approvals for executing the agreement. While there may be many legacy synergies, the real synergy needed going forward will be in packaging – an industry where both are yet to make any real impact.

2023 promises an interesting ride for print in India

Indian Printer and Publisher founded in 1979 is the oldest B2B trade publication in the multi-platform and multi-channel IPPGroup. While the print and packaging industries have been resilient in the past 33 months since the pandemic lockdown of 25 March 2020, the commercial printing and newspaper industries have yet to recover their pre-Covid trajectory.

The fragmented commercial printing industry faces substantial challenges as does the newspaper industry. While digital short-run printing and the signage industry seem to be recovering a bit faster, ultimately their growth will also be moderated by the progress of the overall economy. On the other hand book printing exports are doing well but they too face several supply-chain and logistics challenges.

The price of publication papers including newsprint has been high in the past year while availability is diminished by several mills shutting down their publication paper and newsprint machines in the past four years. Indian paper mills are also exporting many types of paper and have raised prices for Indian printers. To some extent, this has helped in the recovery of the digital printing industry with its on-demand short-run and low-wastage paradigm.

Ultimately digital print and other digital channels will help print grow in a country where we are still far behind in our paper and print consumption and where digital is a leapfrog technology that will only increase the demand for print in the foreseeable future. For instance, there is no alternative to a rise in textbook consumption but this segment will only reach normality in the next financial year beginning on 1 April 2023.

Thus while the new normal is a moving target and many commercial printers look to diversification, we believe that our target audiences may shift and change. Like them, we will also have to adapt with agility to keep up with their business and technical information needs.

Our 2023 media kit is ready, and it is the right time to take stock and reconnect with your potential markets and customers. Print is the glue for the growth of liberal education, new industry, and an emerging economy. We seek your participation in what promises to be an interesting ride.

– Naresh Khanna

Subscribe Now


Please enter your comment!
Please enter your name here